Pay Shareholders
Meg just had a great quater, however they said they were going to direct all the FCF for the rest of the year to debt reduction, basiclly letting the banks off the hook so that the goverment can trash the energy industry and not risk the banking sector.
With these companies and low share prices and low debt levels, what is the point of paying down 2% debt futher, or spending capex on projects where you will not see a dollar of cash flow for two years into the future.
Get Shares Fairly Valued
Time to ramp up the dividend, and get the share prices moving.
Buy Back Cheap Shares
Do not spend money on full cycle capex when buying back share provides and immediated return to the shareholders, the shares are trading too cheap.
Increase the Dividend
A dividend of 6 cents a month is totally sustainable, and that will add significantly to the stock price. Gas is over 4 dollars and Condensate about 90 dollars, what better time that to reward the share holders.
I would rather take a little more risk on the dividend then pay 100 million dollars in hedging losses in a quater, amost twice the current dividend rate.
IMHO